Private equity firms CVC Capital Partners and Advent International have decided not to bid, the sources said ahead of a Wednesday deadline, after deciding the deal would be a better fit for strategic buyers. CVC and Advent declined to comment.
The Brazilian government said in July it was discussing new rules to increase competitiveness in the natural gas industry, including liquid petroleum gas (LPG), in a move that is likely to affect bids for Liquigas, as the Petrobras unit is known.
Itausa has partnered with local LPG distribution firm Copagaz to place a bid, the sources said, asking for anonymity to disclose private talks.
SHV Energy, which distributes LPG in Brazil through its Supergasbras subsidiary, is also expected to bid in a consortium with local rival Consigaz, they said.
Mubadala Investment Company PJSC is planning to deliver a binding offer as well, the people added.
Itausa, SHV and Supergasbras declined to comment. Copagaz, Consigaz and Mubadala did not immediately comment on the matter.
It remains unclear whether Ultrapar Participações SA will partner with another investor to bid for Liquigas. In 2016, Petrobras had agreed to sell Liquigas to Ultrapar, but the deal was blocked by Brazil's antitrust watchdog.
Now, to comply with the rules Petrobras created to avoid new antitrust hurdles, Ultrapar needs to join up with other investors if it wants to bid.
Those rules restrict any LPG distributor with a more than 10% market share from taking any more than a 30% stake in a bidding consortium.
Petrobras is expected to raise between 2.5 billion reais ($630 million) and 3 billion reais ($755 million) with the sale of the unit.
Petrobras received eight bids on the first round, on June 11. Banco Santander Brasil SA, which is advising Petrobras on the deal, declined to comment.
The Liquigas sale is the next step in Petrobras CEO Roberto Castello Branco's plan to sell assets and increase expenditures in core offshore exploration areas.
So far this year, Petrobras has raised more than $12.7 billion, selling pipeline network company TAG for $8.7 billion and privatizing fuel distribution unit Petrobras Distribuidora SA through a share offering that raised $2.5 billion.
Last month, the company also sold three oil fields for $1.5 billion.
(Reporting by Tatiana Bautzer and Carolina Mandl; Editing by Lisa Shumaker)
By Tatiana Bautzer and Carolina Mandl